Patients who meet DSM criteria foro panic disorder are prevalent in the general population and are seen frequently by clinicians. Medication is frequently used to treat panic, and is an acceptable approach. However, troublesome side effects, medication to women of refusal, relapse on discontinuation, and reluctance to present medication to women of childbearing age limit the usefulness of this approach. Behavior therapy has been used to treat agoraphobia, but initial treatments did not focus on panic symptoms. More recently, we and others have developed a cognitive behavioral treatment which is aimed at ameliorating panic directly. Clinical replication series support the efficacy of this approach, but there is a need for controlled studies to test the specific efficacy of the cognitive-behavioral techniques. The study we propose is a randomized controlled trial of cognitive-behavioral treatment vs. a psychoeducation attention control. We hope to document the specific efficacy of the active treatment and to study maintenance of treatment gains over a six month follow-up period. Our study will also include exploratory analyses to begin to address the important question of prediction of success of failure using this modality. The proposed study represents one part of an ongoing collaborative effort with Dr. Abby Fyer at NY State Psychiatric Institute to study the effects of cognitive behavioral treatment on sodium lactate vulnerability. We are submitting a separate grant to request funding for continuation of this aspect of the project. The current study has important treatment implications. It also will provide information related to psychopathological mechanisms in panic and its consequences.